BEERG Newsletter 37 - Platform Economy: Uber and Lyft to pay $328m settlement to drivers

Uber and Lyft have agreed to pay a combined $328m to settle claims made by New York's attorney general that the ride-sharing companies systematically denied drivers pay and benefits. The settlement will also guarantee drivers minimum hourly rates, paid sick leave, and in-app chat support. Attorney General Letitia James called the settlement the largest wage theft settlement in her office's history. 

The violations occurred between 2014 and 2017 for Uber, and between 2015 and 2017 for Lyft. The settlement will benefit over 100,000 current and former drivers in the state. Uber and Lyft have faced similar claims nationwide, with drivers accusing the companies of shortchanging them by classifying them as independent contractors instead of employees. The investigation was prompted by concerns raised by the New York Taxi Workers Alliance.

Some weeks ago, the Irish Supreme Court held that workers delivering Domino’s pizzas were employees and not self-employed. This ruling is in line with what courts across Europe have been deciding over recent, that gig economy workers are employees, not self-employed, through there have been some judicial decisions which have going the other way.

And, as we note in the opening item, members of the European Parliament are pushing hard to finalise the proposed Directive on the employment status of gig economy workers before Parliament breaks up for next June’s election. How extensive will be the definition of a “gig economy worker” and whether such workers should be presumed to be employees unless a platform can prove otherwise have still to be decided. 

But between court rulings and legislative initiatives, it is clear that the “wild west” days of the gig economy are coming to an end.